tatos@irc.rizon.net said...
In the age, actually one have to actually watch out for 'Card Tricks', affectionately known at 'clauses that specifically' protect the Credit Card Companies' interests, in general.
No Joke - I mean No Joke. I have friends who incur a lot of debts just by little overdrafting and letting the mini-debt grow and grow.
This doesn't come at a surprise to anybody, but most money lenders do not have your best interests at heart. Some even send out 'misleading' marketing information as lure. Even the most reputable credit card issues bombard customers with 'benefits' that are specially designed to 'pad' fees and interest payments. Cash Advances and convenience checks don't come cheap, just read about the new Hybrid Cards in Singapore, and one can imagine a consequences of mis-using it, like overdrafting a 'debit card'.
There are some common 'ouchies' that could happen if you own a credit card.
1) Magical Appearing Annual Fee. You signed up for a card with no Annual fee. Then out of the sudden, you find one, some lenders start charging annual feel who pay their bills off every month - Its best to cancel the card AS SOON AS POSSIBLE.
2) Sliding Credit Line. Another inethical but not uncommon practice to entice a customer to use a cash advance check or skip-a-month payment offer and then lower their credit limit. The maxed-out customer is then charged an additional fee for being above it. Or just simply lower customer's credit limit once they reach it - It depends on how disciplined you are with your card, you might not have to worry as much as the other fellow if you are really concious about debt payments.
3) Mysterious Fees. You may not have to pay a charge to get a cash advance. But most banks charges hefty transaction fees, which can easily go around 2% of the total amount and no less than $10. Also watch out for calling the toll-free number to check your balance and penalty fees for ACCOUNT INACTIVITY. (Don't forget about the credit card buried at the bottom of your wallet!)
4) The Disappearing Grace Period. Watch out for lenders who pull the grace period out from under you. Remember, if your grace period is eliminated, you'll accrue interest from the day you make a purchase. And the only way to avoid this charge would be to pay your bill before you even receive it. This is the most horrible act I've heard, but it yet happened to Singapoeans, I think.
5) Credit Report Blunders - These do happen in real life. But with little diligence on your part, such inaccuracies can be looked into, updated and even removed from your account relatively quickly. If you are sure thats an Error (by keeping records of copies of your purchases, checks and past billing statements) and they still wouldn't bulge in helping you, try finding any authority to investigate your claim AS SOON AS POSSIBLE.
Not that Credit Cards are bad, its just require a little more due diligence prior getting a card and maintaining that card for your own conveniences and benefits, like actually assist in your budgeting by posting monthly statement print statements, etc. While also bolster your image in the eyes of another lender, especially if you consider using credit to establish a firm borrowing history, if you are going to apply for a large line of credit, like mortage or car loan, but overall it depends on one's disciplined to use it responsibly, and productively.
And remember, if you are going to cancel a card, it is best to contact though the Hotline AS SOON AS POSSIBLE and CLOSE THE ACCOUNT rather than going though other means (waiting for them to close the account for you), for this may help to reserve your Credit Score (if such a thing exist).
E-mail: kinlian@gmail.com. Website: www.tankinlian.com Facebook: www.facebook.com/kinlian
Saturday, May 17, 2008
More trains for commuters
I congratulate SMRT and the Land Transport Authority for introducing more train services to meet the higher demand for public transport. This will reduce the over-crowding and waiting time, and make the journey more pleasant.
I hope that LTA will allow SMRT to introduce more feeder services to bring commuters to the train station. This allows a more integrated service. The feeder services will be easier for commuters to use. I hope that these new feeder services do not make many long loops within the area that they serve.
SBS Transit can continue to provide a competitive service to provide point-to-point journeys.
I hope that LTA officials reading this blog can pass my congratulation and suggestion to your bosses.
I hope that LTA will allow SMRT to introduce more feeder services to bring commuters to the train station. This allows a more integrated service. The feeder services will be easier for commuters to use. I hope that these new feeder services do not make many long loops within the area that they serve.
SBS Transit can continue to provide a competitive service to provide point-to-point journeys.
I hope that LTA officials reading this blog can pass my congratulation and suggestion to your bosses.
Return on Vivolife policies
Catherine Choong posted a detailed posting on Vivolife (i.e. whole life policy with premiums paid for 20 years) in The Online Citizen. She pointed out several benefits of the policy, (which I accept). The main drawback of the policy, in my view, is the somewhat low return to the policyholder at the end of 20 years.
A few weeks ago, a policyholder asked my advice on three Vivolife policies that he bought for his family. I calculated the return on the policies as follows:
The total premium paid for 20 years is shown in (2). If the premium is invested to earn a net yield of 4.5%, the accumulated amount is shown in (3). The expected gain is shown in (4). The cash value of the policy (based on a gross yield of 5.25%) is shown in (5). The gain in cash value is shown in (6).
Assuming a gross yield of 5.25%, the Vivolife policies took away between 58% to 69% of the expected gain, leaving 31% to 42% of the gain to the policyholder. If the gross yield is lower, the value to the policyholder will be even lower.
If the policyholder buy the insurance cover separately, the cost of the cover is likely to be not more than 20% of the expected gain (just my guess). A good adviser will be able to calculate this alternative cost for the customer to make an informed choice.
If these examples do not reflect a true picture of the return on the Vivolife policy, I hope that Caterine Choong will send some other examples to me. I shall be happy to post them here.
Note: I believe that the Vivolife gives better values compared to similar products in the market (although I do not have concrete evidence on this point).
A few weeks ago, a policyholder asked my advice on three Vivolife policies that he bought for his family. I calculated the return on the policies as follows:
1. 2. 3. 4. 5. 6. 7. 8.
Policy Premium Accum Expected Cash Value Gain % Taken
20 yrs @4.5% gain 20 yrs in CV away
Self $29,080 $47,666 $18,586 $34,907 $5,827 31% 69%
Wife $24,340 $39,890 $15,550 $29,478 $5,138 33% 67%
Son $23,420 $38,389 $15,969 $30,234 $6,814 42% 58%
The total premium paid for 20 years is shown in (2). If the premium is invested to earn a net yield of 4.5%, the accumulated amount is shown in (3). The expected gain is shown in (4). The cash value of the policy (based on a gross yield of 5.25%) is shown in (5). The gain in cash value is shown in (6).
Assuming a gross yield of 5.25%, the Vivolife policies took away between 58% to 69% of the expected gain, leaving 31% to 42% of the gain to the policyholder. If the gross yield is lower, the value to the policyholder will be even lower.
If the policyholder buy the insurance cover separately, the cost of the cover is likely to be not more than 20% of the expected gain (just my guess). A good adviser will be able to calculate this alternative cost for the customer to make an informed choice.
If these examples do not reflect a true picture of the return on the Vivolife policy, I hope that Caterine Choong will send some other examples to me. I shall be happy to post them here.
Note: I believe that the Vivolife gives better values compared to similar products in the market (although I do not have concrete evidence on this point).
Give good value products to the people who trust us
POSTED IN ONLINE CITIZEN
http://theonlinecitizen.com/2008/05/the-truth-about-life-insurance/#comment-7789
Dear Catherine Choong
You can read these FAQs to understand why I recommend buy term and invest the difference.
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/
Life insurance is important for a family,but it can be low cost insurance, covering death, accidents and critical illness. I invite readers to read my FAQ to make an informed choice.
http://www.tankinlian.com/faq/choice.html
The remaining savings, invested in a low cost fund, is likely to give an accumulated value that will be more than the face value of the policy at the end of 30 years. The policyholder does not need to die or suffer a critical illness to get this face value. The invested fund is likely to produce this sum.
http://www.tankinlian.com/faq/savings.html
A higher accumulated value in an investment fund (compared to a lower cash value in a life insurance policy) will give more money for the policyholder to spend during his or her retirement years. This is an important function of financial planning that is not well served by a life insurance policy, due to its high cost structure.
Although the return from an investment fund is subject to volatility, it is not a serious matter for a long term investor. This point is covered in my FAQ. A life insurance policy with a high terminal bonus, also provides uncertain cash value, and is less transparent.
The life insurance policy gives a poor return due to the "effect of deduction". This is the huge sum that is taken away from the policyholder to pay the marketing expenses and other charges.
My general analysis is on the life insurance products commonly sold in the market. I believe that the "effect of deduction", in the case of NTUC Income, are lower than the market. It is for you, as the adviser, to tell the policyholder about this lower effect of deduction and demonstrate the value of the Vivolife product.
Someone showed me a benefit illustration for Vivolife. I was surprised that the cash value at the end of 20 years still showed a poor yield. I hope that this is an aberration, and that the yield for most other Vivolife products are better. Perhaps you can show some examples, illustrating the total premiums paid for 20 years, the cash value and the "effect of deduction" for the 20 years.
I have other point about an inflexible life insurance policy that forces the policyholder to continue paying the premiums and imposing a big penalty on early termination. This is not fair to the general public.
During the time that I headed NTUC Income, I declared high annual bonus and provided higher cash value (compared to the market), so that the policyholders who cannot continue the policy does not suffer a large penalty.
I believe that a flexible savings plan invested in a low cost fund is better for the policyholders in this modern time. Many of them are now investing in low cost unit trusts and mutual funds available from other platforms.
I hope that the life insurance industry and advisers can rise to the challenge to give good value products to the large number of people who entrust their future to us.
Tan Kin Lian
http://theonlinecitizen.com/2008/05/the-truth-about-life-insurance/#comment-7789
Dear Catherine Choong
You can read these FAQs to understand why I recommend buy term and invest the difference.
http://www.tankinlian.com/faq/savings.html
http://www.tankinlian.com/faq/
Life insurance is important for a family,but it can be low cost insurance, covering death, accidents and critical illness. I invite readers to read my FAQ to make an informed choice.
http://www.tankinlian.com/faq/choice.html
The remaining savings, invested in a low cost fund, is likely to give an accumulated value that will be more than the face value of the policy at the end of 30 years. The policyholder does not need to die or suffer a critical illness to get this face value. The invested fund is likely to produce this sum.
http://www.tankinlian.com/faq/savings.html
A higher accumulated value in an investment fund (compared to a lower cash value in a life insurance policy) will give more money for the policyholder to spend during his or her retirement years. This is an important function of financial planning that is not well served by a life insurance policy, due to its high cost structure.
Although the return from an investment fund is subject to volatility, it is not a serious matter for a long term investor. This point is covered in my FAQ. A life insurance policy with a high terminal bonus, also provides uncertain cash value, and is less transparent.
The life insurance policy gives a poor return due to the "effect of deduction". This is the huge sum that is taken away from the policyholder to pay the marketing expenses and other charges.
My general analysis is on the life insurance products commonly sold in the market. I believe that the "effect of deduction", in the case of NTUC Income, are lower than the market. It is for you, as the adviser, to tell the policyholder about this lower effect of deduction and demonstrate the value of the Vivolife product.
Someone showed me a benefit illustration for Vivolife. I was surprised that the cash value at the end of 20 years still showed a poor yield. I hope that this is an aberration, and that the yield for most other Vivolife products are better. Perhaps you can show some examples, illustrating the total premiums paid for 20 years, the cash value and the "effect of deduction" for the 20 years.
I have other point about an inflexible life insurance policy that forces the policyholder to continue paying the premiums and imposing a big penalty on early termination. This is not fair to the general public.
During the time that I headed NTUC Income, I declared high annual bonus and provided higher cash value (compared to the market), so that the policyholders who cannot continue the policy does not suffer a large penalty.
I believe that a flexible savings plan invested in a low cost fund is better for the policyholders in this modern time. Many of them are now investing in low cost unit trusts and mutual funds available from other platforms.
I hope that the life insurance industry and advisers can rise to the challenge to give good value products to the large number of people who entrust their future to us.
Tan Kin Lian
Get a quote on your motor insurance
Dear Mr Tan,
1. In 2006 I bought my car insurance from company X and the premium is $4XX
And now i need to renew and the amount is $6XX, which is around $200 more. The
car is now older by two more years and the value is lower by maybe 30%, but the premium increased by 30%. I have 100% clean record for the passed 20 years. Should I still stay royal to this company?
I wonder why such a great increased just two years . Since my car value drop more than 25 to 30% why the premium increased?
REPLY
You should contact other insurance companies and ask for a quote. Read this FAQ
http://www.tankinlian.com/faq/motord.html
The premium on your car depends on the claim experience, and not on the value of the car. Last year, the claims increased significantly and most insurance companies made big losses. They have to increase the premium rate by more than 20% to catch up with the claims.
1. In 2006 I bought my car insurance from company X and the premium is $4XX
And now i need to renew and the amount is $6XX, which is around $200 more. The
car is now older by two more years and the value is lower by maybe 30%, but the premium increased by 30%. I have 100% clean record for the passed 20 years. Should I still stay royal to this company?
I wonder why such a great increased just two years . Since my car value drop more than 25 to 30% why the premium increased?
REPLY
You should contact other insurance companies and ask for a quote. Read this FAQ
http://www.tankinlian.com/faq/motord.html
The premium on your car depends on the claim experience, and not on the value of the car. Last year, the claims increased significantly and most insurance companies made big losses. They have to increase the premium rate by more than 20% to catch up with the claims.
Friday, May 16, 2008
Nominating a beneficiary
Dear Mr Tan
I am single and have no relatives. I went to an insurance company to change my beneficiary but was informed that I cannot nominate someone not related to me. Instead, I was asked to change my beneficiary to my estate and have to write a will. This brings about the following questions:
1. For people with no relatives, is it still necessary to have an insurance policy?
2. Does it mean I have no choice but to engage the services of a lawyer to draw up a will?
3. What is the cost involved to engage a lawyer to do a will.
REPLY
You can leave your policy money to your estate. If you do not have a will, it will be distributed according to the intestate law.
If you wish to write a will, you can use the will writing service provided by NTUC Income. You can get more details from Big Trumpet, www.bigtrumpet.com.sg
I am single and have no relatives. I went to an insurance company to change my beneficiary but was informed that I cannot nominate someone not related to me. Instead, I was asked to change my beneficiary to my estate and have to write a will. This brings about the following questions:
1. For people with no relatives, is it still necessary to have an insurance policy?
2. Does it mean I have no choice but to engage the services of a lawyer to draw up a will?
3. What is the cost involved to engage a lawyer to do a will.
REPLY
You can leave your policy money to your estate. If you do not have a will, it will be distributed according to the intestate law.
If you wish to write a will, you can use the will writing service provided by NTUC Income. You can get more details from Big Trumpet, www.bigtrumpet.com.sg
Collective Protest - Update 16 May
I received 54 signatures today, giving the cumulative total of 270 signatures. I am heartened that the forms contained more signatures. One policyholder collected 7 signatures on the same form, from several families.
Someone sent an e-mail to me yesterday, volunteering to collect signatures at MRT stations over the next two weekends. I advised him that this is not necessary. He should not collect signatures from strangers. I do not want to be accused of creating public disorder.
He was quite worried that I may fail to collect 1,000 signatures, as Singaporeans tend to be self centered. I asked him not to worry.
I have asked many policyholders, including those who submitted the signatures earlier, to get more signatures from their friends and colleagues. If we work together, we can achieve this target. You can also scan the signature form and send to me at kinlian@gmail.com.
Someone sent an e-mail to me yesterday, volunteering to collect signatures at MRT stations over the next two weekends. I advised him that this is not necessary. He should not collect signatures from strangers. I do not want to be accused of creating public disorder.
He was quite worried that I may fail to collect 1,000 signatures, as Singaporeans tend to be self centered. I asked him not to worry.
I have asked many policyholders, including those who submitted the signatures earlier, to get more signatures from their friends and colleagues. If we work together, we can achieve this target. You can also scan the signature form and send to me at kinlian@gmail.com.
ERP Charges
I try to avoid driving to work. I prefer to take the MRT. Sometimes I have to drive, due to the need to visit a few places.
There are some many gantries on many roads. Each time, I pass a gantry, there is a sum deducted from my cash card. I do not know what is the ERP charge. I only need how much cash remains on my cash card.
I suggest that the Land Transport Authority should display the charges on the gantry, next to the sign "ERP in Operation". At least the motorist will know what is the fee.
I understand that separate charges apply to different types of vehicles. Perhaps LTA only needs to display the charges for motor cars and motor cycles, as they are the most frequent road users. The charges for other types of vehicles can be set at a certain ratio to the charge for motor cars.
As the charges vary by time of day, it is only fair that the actual charges should be displayed. I hope that officials of the LTA are reading this blog.
There are some many gantries on many roads. Each time, I pass a gantry, there is a sum deducted from my cash card. I do not know what is the ERP charge. I only need how much cash remains on my cash card.
I suggest that the Land Transport Authority should display the charges on the gantry, next to the sign "ERP in Operation". At least the motorist will know what is the fee.
I understand that separate charges apply to different types of vehicles. Perhaps LTA only needs to display the charges for motor cars and motor cycles, as they are the most frequent road users. The charges for other types of vehicles can be set at a certain ratio to the charge for motor cars.
As the charges vary by time of day, it is only fair that the actual charges should be displayed. I hope that officials of the LTA are reading this blog.
I cancelled my credit card
Some banks and service providers seem to feel that it is their commercial right to impose hefty charges for late payment or other administrative oversight.
A few months ago, I received a letter from a credit card company informing me that the charge for late payment and for insufficient funds is in the order of $30 to $50. This is in addition to their interest of 2% per month. I was so angry that I called the hotline to cancel the credit card. The customer service officer was surprised at my action. He did not seem to understand why I reacted in that manner.
A few months ago, I received a letter from a credit card company informing me that the charge for late payment and for insufficient funds is in the order of $30 to $50. This is in addition to their interest of 2% per month. I was so angry that I called the hotline to cancel the credit card. The customer service officer was surprised at my action. He did not seem to understand why I reacted in that manner.
Read my FAQs
I have more than 20 FAQs in this webpage:
http://www.tankinlian.com/faq/
They cover a wide range of topics and were written over the past year. Most of them are still relevant today. They are educational and fun to read.
I am not able to provide specific advice to the financial planning needs of individual visitors to my blog. It takes too much time, and is really the role of a fee-based Financial Adviser. At best, I can refer them to a specific FAQ.
Try to ready my FAQs and see if you can find the answers to your issues.
http://www.tankinlian.com/faq/
They cover a wide range of topics and were written over the past year. Most of them are still relevant today. They are educational and fun to read.
I am not able to provide specific advice to the financial planning needs of individual visitors to my blog. It takes too much time, and is really the role of a fee-based Financial Adviser. At best, I can refer them to a specific FAQ.
Try to ready my FAQs and see if you can find the answers to your issues.
Uneasy about two insurance products
Mr. Tan,
As I read your blog, I began to feel very uneasy about the two products that I purchased recently. I hope that you could advice me, because I feel apprehensive of what insurance agents are telling me now.
Recently, because of the low fixed desposit interest rate, we invested our hard-earned savings of $40K in a unit trust (100% on GROWTH combined fund). We were also advised by the agent to purchase a life insurance plan VIVOLIFE for my son.
I like your advice on the following:-
a) Is it really necessary for me to insure my son now? Does he needs it anyway?
b) Is the unit trust considered as an "Investment linked policy"?
REPLY
I usually advice parents not to take life insurance for their child. It is not needed. It is better for a parent to save for a child in a low cost investment fund. This is described in the following FAQ:
http://www.tankinlian.com/faq/child.html
Your investment in the Growth Combined Fund is made through a single premium policy, i.e. the Flexi-Link. The upfront charge is 3%. The annual charge is about 1%. I think that these charges are all right. An alternative is for you to invest in the STI ETF (StateStreet Trakker fund), where the upfront and annual charge is 0.3%.
The Flexi Link is an ILP. However, as it is a single premium, the charge is acceptable. You should avoid the regular premium ILP, where the charges are very high.
Read this FAQ:
http://www.tankinlian.com/faq/ilp.html
I hope that they help you to make the right decisions.
As I read your blog, I began to feel very uneasy about the two products that I purchased recently. I hope that you could advice me, because I feel apprehensive of what insurance agents are telling me now.
Recently, because of the low fixed desposit interest rate, we invested our hard-earned savings of $40K in a unit trust (100% on GROWTH combined fund). We were also advised by the agent to purchase a life insurance plan VIVOLIFE for my son.
I like your advice on the following:-
a) Is it really necessary for me to insure my son now? Does he needs it anyway?
b) Is the unit trust considered as an "Investment linked policy"?
REPLY
I usually advice parents not to take life insurance for their child. It is not needed. It is better for a parent to save for a child in a low cost investment fund. This is described in the following FAQ:
http://www.tankinlian.com/faq/child.html
Your investment in the Growth Combined Fund is made through a single premium policy, i.e. the Flexi-Link. The upfront charge is 3%. The annual charge is about 1%. I think that these charges are all right. An alternative is for you to invest in the STI ETF (StateStreet Trakker fund), where the upfront and annual charge is 0.3%.
The Flexi Link is an ILP. However, as it is a single premium, the charge is acceptable. You should avoid the regular premium ILP, where the charges are very high.
Read this FAQ:
http://www.tankinlian.com/faq/ilp.html
I hope that they help you to make the right decisions.
Living Endowment
Dear Sir,
I'm interested to know about the Living Endowment policy. I like to hear from an independent and unbiased views (like your good-self) on the above policy from NTUC rather than from the insurance agents.
The questions are;
> does this policy affected by the bonus change?
> does it fare better than 'Vivolife' or otherwise?
> does this policy give good value to policyholder?
> any other recommendation?
REPLY
I remember the Living Endowment was designed a long time ago. It is an endowment policy which covers critical illness and death.
I do not know how it will be impacted by the change in bonus structure and how they compare with the new plans.
My general advice on financial planning is hown in this FAQ:
http://www.tankinlian.com/faq/savings.html
I'm interested to know about the Living Endowment policy. I like to hear from an independent and unbiased views (like your good-self) on the above policy from NTUC rather than from the insurance agents.
The questions are;
> does this policy affected by the bonus change?
> does it fare better than 'Vivolife' or otherwise?
> does this policy give good value to policyholder?
> any other recommendation?
REPLY
I remember the Living Endowment was designed a long time ago. It is an endowment policy which covers critical illness and death.
I do not know how it will be impacted by the change in bonus structure and how they compare with the new plans.
My general advice on financial planning is hown in this FAQ:
http://www.tankinlian.com/faq/savings.html
Persevere
Dear Sir,
After going through your blog, I really admire your integrity. During the negative publicity of IDAC, so much injustice has been done to you.
Somehow, I could recall that, during the 50's and 60's, whoever is a champion of the man in the street, will be labeled as communist. When you try to bring down the motor insurance rate, so much bad publicity of IDAC is published.
Mr Tan!, persevere, God Bless
GW
After going through your blog, I really admire your integrity. During the negative publicity of IDAC, so much injustice has been done to you.
Somehow, I could recall that, during the 50's and 60's, whoever is a champion of the man in the street, will be labeled as communist. When you try to bring down the motor insurance rate, so much bad publicity of IDAC is published.
Mr Tan!, persevere, God Bless
GW
Policies with high terminal bonuses
Hi Mr Tan,
I heard about your collective protest on the recent changes in Income's bonus structure. I am not a par fund policyholder but I principally do not agree with such bonus structures in the market. They have the risks of investment-linked plans but do not offer the transparency and much value to policyholders.
I have managed to collate some simple statistics from MAS returns on fund solvency and investment allocations, which may help you build your case. We can clearly see that those companies using the "terminal bonus" strategy has very high solvency ratios, yet I wonder why they do not invest more in equities or vest more of the returns on their policyholders?
Hope it helps. Good luck.
T
I heard about your collective protest on the recent changes in Income's bonus structure. I am not a par fund policyholder but I principally do not agree with such bonus structures in the market. They have the risks of investment-linked plans but do not offer the transparency and much value to policyholders.
I have managed to collate some simple statistics from MAS returns on fund solvency and investment allocations, which may help you build your case. We can clearly see that those companies using the "terminal bonus" strategy has very high solvency ratios, yet I wonder why they do not invest more in equities or vest more of the returns on their policyholders?
Hope it helps. Good luck.
T
Investing in Foreign Currency Deposits
Dear Mr. Tan,
What do you think about foreign currency fixed deposts that pay about 7% to 8%? I am of investing in NZ$ and A$. The money has been in the saving account for quite some time.
REPLY
I have a lot of my own money invested in AUD and NZD. I like the high interest rate. I hope that the currency will be stable, but this is a risk that the investor has to take.
Read this FAQ:
http://www.tankinlian.com/faq/foreign.html
All the best to you!
What do you think about foreign currency fixed deposts that pay about 7% to 8%? I am of investing in NZ$ and A$. The money has been in the saving account for quite some time.
REPLY
I have a lot of my own money invested in AUD and NZD. I like the high interest rate. I hope that the currency will be stable, but this is a risk that the investor has to take.
Read this FAQ:
http://www.tankinlian.com/faq/foreign.html
All the best to you!
Managed Care
I have agreed to present a paper to a conference on "managed care". It is targetted at human resource managers.
Why are HR managers interested in "managed care"? They find the cost of providing medical benefits to employees for both outpatient and in-hospital treatment, to be increasing over the years. They hope that "managed care" can help to slow down the increase.
What is "managed care"? Under managed care, the insurance company is more active in managing the costs of treatment, e.g. to make sure that the patient gets the right treatment, avoid overcharging by the providers, avoid abuses, and most importantly, to keep the employees healthy.
If the costs can be managed, the employer pays a lower premium for the medical benefits next year. The HR manager will get a better performance rating!
Why are HR managers interested in "managed care"? They find the cost of providing medical benefits to employees for both outpatient and in-hospital treatment, to be increasing over the years. They hope that "managed care" can help to slow down the increase.
What is "managed care"? Under managed care, the insurance company is more active in managing the costs of treatment, e.g. to make sure that the patient gets the right treatment, avoid overcharging by the providers, avoid abuses, and most importantly, to keep the employees healthy.
If the costs can be managed, the employer pays a lower premium for the medical benefits next year. The HR manager will get a better performance rating!
International Health Plan
Dear Mr. Tan,
My work requires me to travel around the Asian region and to visit many cities. If I fall sick in any city, how can I get medical treatment? Is there an international plan that provides wide coverage?
REPLY
A few international insurance companies offer this type of plan. It offers access to a large number of hospitals around the world and pays for the cost of medical treatment (except for a small co-payment).
In the globalised world, more people are working in other countries. Many Singaporeans are now working overseas. Many expatriates work in Singapore. There is a need for this type of international health plan.
Apart from paying the bills, these international plans provide easy access to the quality hospital. For example, they know which is a good hospital to be admitted and will pay the bill. It is "cashless payment" for the customer.
If you do not have an international health plan, you have the option to fly back to Singapore and be treated here and be covered by the Shield plan. This may be suitable for non-emergency situations.
My work requires me to travel around the Asian region and to visit many cities. If I fall sick in any city, how can I get medical treatment? Is there an international plan that provides wide coverage?
REPLY
A few international insurance companies offer this type of plan. It offers access to a large number of hospitals around the world and pays for the cost of medical treatment (except for a small co-payment).
In the globalised world, more people are working in other countries. Many Singaporeans are now working overseas. Many expatriates work in Singapore. There is a need for this type of international health plan.
Apart from paying the bills, these international plans provide easy access to the quality hospital. For example, they know which is a good hospital to be admitted and will pay the bill. It is "cashless payment" for the customer.
If you do not have an international health plan, you have the option to fly back to Singapore and be treated here and be covered by the Shield plan. This may be suitable for non-emergency situations.
Cover for Natural Disasters
Dear Mr. Tan
Does a life insurance policy cover death by earthquake, such as happened in Sichuan? I am told that "acts of God" are excluded. Is earthquake considered an "act of God"?
REPLY
A life insurance policy, e.g. whole life, endowment or term insurance policy, covers death by earthquake and other natural disasters. It actually covers death from all causes, except for suicide during the first year.
Natural disasters are usually excluded for property insurance, i.e. insuring your home, factory, shop or motor vehicle. These natural disasters are specifically excluded in the policy, e.g. earthquake, windstorm, volcanic eruptions, etc. You can buy specific cover for these events by paying an additional premium.
I am not sure if these natural disasters are excluded from personal accident insurances. You have to enquire about it. It is better to pay a slightly higher premium and have these events included in the cover.
The terms "act of God" or "natural disaster" are not specifically used in the policy. The specific events are named in the Exclusion clause.
Does a life insurance policy cover death by earthquake, such as happened in Sichuan? I am told that "acts of God" are excluded. Is earthquake considered an "act of God"?
REPLY
A life insurance policy, e.g. whole life, endowment or term insurance policy, covers death by earthquake and other natural disasters. It actually covers death from all causes, except for suicide during the first year.
Natural disasters are usually excluded for property insurance, i.e. insuring your home, factory, shop or motor vehicle. These natural disasters are specifically excluded in the policy, e.g. earthquake, windstorm, volcanic eruptions, etc. You can buy specific cover for these events by paying an additional premium.
I am not sure if these natural disasters are excluded from personal accident insurances. You have to enquire about it. It is better to pay a slightly higher premium and have these events included in the cover.
The terms "act of God" or "natural disaster" are not specifically used in the policy. The specific events are named in the Exclusion clause.
Thursday, May 15, 2008
Reduce commuting - view from NZ
Dear Mr. Tan,
I read your article titled "Reducing commuting time - national effort needed" in The Online Citizen. Here Are my observations, based on my working experience in both Spore and NZ:
1) When I was in Spore, I subscribed to the idea of buying a flat. With that, I lost the freedom to live near my work place which changes on average once every few years. I spent between 1 to 1.5 hours commuting one way daily, and it's not a pleasant journey because of the crowded public transport.
2) Since I do not plan to live for the long term in NZ, I'm renting now, and I managed to find an apartment that's a 5 mins walk from my office, right at the heart of the city. It's very convenient with everything within 15 mins walking, and many people are quite surprised to learn that I don't own a car here. One problem though, rental can fluctuate a lot, I was recently hit by a 25% increment. I believe it's the same situation in Spore.
3) Living near one's work place has many benefits, for example, more sleep, less stressful commuting, better concentration and productivity at work. A healthier lifestyle too, because I can go home for lunch instead of eating out (the cost saving is not significant in Spore's context, but it makes sense in NZ). Not to forget the savings in transport cost, as mentioned in your article. A lot of things can happen in a 1 to 1.5 hrs commute, eg. MRT break down, accident on the road causing massive jams, which add to the stress(knowing one will be late for work).
4) For the majority of Singaporeans, it probably makes more financial sense to buy a HDB flat at the 2.5% mortgage rate, because it makes the mortgage payment very affordable than the average rental. In NZ, the mortage rate is over 9%, so renting can be more attractive.
5) The differences in the culture, especially in the mindset of most employers. In the 3 jobs I have held in Spore, most of the time I'm expected to be on call 24/7, this is very disruptive to my personal life. In NZ, although I'm in the same line, the expectation is 40 hours a week, and it's up to us to adjust our daily hours. I tend to believe that Sporean employers need to see their employees working at their desks in the office, and one feels uneasy to leave on the dot. Telecommuting is also very common in NZ. People work from home at times for various reasons, like to take care of their children.
It's a pity that the public transport in Auckland is not very well implemented and expensive, low demand leads low frequency. Even so, the buses seldom reach their full seating capacity. If only they are better, I'll definitely live in the suburbs.
HL
I read your article titled "Reducing commuting time - national effort needed" in The Online Citizen. Here Are my observations, based on my working experience in both Spore and NZ:
1) When I was in Spore, I subscribed to the idea of buying a flat. With that, I lost the freedom to live near my work place which changes on average once every few years. I spent between 1 to 1.5 hours commuting one way daily, and it's not a pleasant journey because of the crowded public transport.
2) Since I do not plan to live for the long term in NZ, I'm renting now, and I managed to find an apartment that's a 5 mins walk from my office, right at the heart of the city. It's very convenient with everything within 15 mins walking, and many people are quite surprised to learn that I don't own a car here. One problem though, rental can fluctuate a lot, I was recently hit by a 25% increment. I believe it's the same situation in Spore.
3) Living near one's work place has many benefits, for example, more sleep, less stressful commuting, better concentration and productivity at work. A healthier lifestyle too, because I can go home for lunch instead of eating out (the cost saving is not significant in Spore's context, but it makes sense in NZ). Not to forget the savings in transport cost, as mentioned in your article. A lot of things can happen in a 1 to 1.5 hrs commute, eg. MRT break down, accident on the road causing massive jams, which add to the stress(knowing one will be late for work).
4) For the majority of Singaporeans, it probably makes more financial sense to buy a HDB flat at the 2.5% mortgage rate, because it makes the mortgage payment very affordable than the average rental. In NZ, the mortage rate is over 9%, so renting can be more attractive.
5) The differences in the culture, especially in the mindset of most employers. In the 3 jobs I have held in Spore, most of the time I'm expected to be on call 24/7, this is very disruptive to my personal life. In NZ, although I'm in the same line, the expectation is 40 hours a week, and it's up to us to adjust our daily hours. I tend to believe that Sporean employers need to see their employees working at their desks in the office, and one feels uneasy to leave on the dot. Telecommuting is also very common in NZ. People work from home at times for various reasons, like to take care of their children.
It's a pity that the public transport in Auckland is not very well implemented and expensive, low demand leads low frequency. Even so, the buses seldom reach their full seating capacity. If only they are better, I'll definitely live in the suburbs.
HL
Collective Protest - Update 15 May
I have just returned from a 4 day business trip to Jakarta. After clearing my stack of incoming mail, I have now obtained a total of 210 signatures for the Collective Protest. It is quite tedious work as many of the forms contain only 1 or 2 signatures.
There are many individual messages of support from policyholders. I apologise for not being able to reply to you individually.
Some of the sigantures are now being sent by pdf to me at kinlian@gmail.com. A few forms contained many signatures (which is what I need most!)
I hope that those who have responded earlier to me, can help to get more signatures from your family, friends and colleagues. You can scan and send by e-mail to me. I need your help to achieve the target of 1,000 signatures by 25 May (which is just 10 days away).
There are many individual messages of support from policyholders. I apologise for not being able to reply to you individually.
Some of the sigantures are now being sent by pdf to me at kinlian@gmail.com. A few forms contained many signatures (which is what I need most!)
I hope that those who have responded earlier to me, can help to get more signatures from your family, friends and colleagues. You can scan and send by e-mail to me. I need your help to achieve the target of 1,000 signatures by 25 May (which is just 10 days away).
Inconsiderate Practices
I have encountered many businesses with these inconsiderate practices:
1. Detailed survey form containing more than 30 questions
2. Do not reply to your feedback or questions, submitted through their feedback channel.
These businesses are not genuinely interested in their customers. They only want to make a "show".
Some businesses require a lot of details to be provided in their business form and website forms. They take a long time to complete. Often, several of the information are not necessary for the transaction. It creates an unncessary hassle for the customer.
1. Detailed survey form containing more than 30 questions
2. Do not reply to your feedback or questions, submitted through their feedback channel.
These businesses are not genuinely interested in their customers. They only want to make a "show".
Some businesses require a lot of details to be provided in their business form and website forms. They take a long time to complete. Often, several of the information are not necessary for the transaction. It creates an unncessary hassle for the customer.
Low cost Investment Linked Policy
Dear Mr. Tan
You mentioned few attributes of good financial products, can you recommend specially those available in the market? I received a brochure from an insurance company that sells a financial product that is similar to what you mentioned, low fee. What do you think of that?
REPLY
You have to check the "allocation rates" of the investment linked policy, which is a form of upfront charge.
Read this FAQ:
http://www.tankinlian.com/faq/ilp.html
You mentioned few attributes of good financial products, can you recommend specially those available in the market? I received a brochure from an insurance company that sells a financial product that is similar to what you mentioned, low fee. What do you think of that?
REPLY
You have to check the "allocation rates" of the investment linked policy, which is a form of upfront charge.
Read this FAQ:
http://www.tankinlian.com/faq/ilp.html
Term Insurance
1) For term insurance, does the insurance company take into account the health condition of the insured?
Reply: The life insurance company will increase the premium rate for a person who is in poor health. The standard rate apply to a healthy person.
2) I've bought a 10-year term insurance in place of a mortagage insurance just to cover my loan in case of mishap. But i've read somewhere that term insurance should be around 20 - 25 years, is my 10-year term, which is in line with my loan tenure, too short? I'm almost 40.
Reply: It is all right to buy a term insurance policy for the duration to cover a mortgage loan. You can buy a separate term insurance policy to cover the loss of earnings up to, say ,age 65 years.
Reply: The life insurance company will increase the premium rate for a person who is in poor health. The standard rate apply to a healthy person.
2) I've bought a 10-year term insurance in place of a mortagage insurance just to cover my loan in case of mishap. But i've read somewhere that term insurance should be around 20 - 25 years, is my 10-year term, which is in line with my loan tenure, too short? I'm almost 40.
Reply: It is all right to buy a term insurance policy for the duration to cover a mortgage loan. You can buy a separate term insurance policy to cover the loss of earnings up to, say ,age 65 years.
Buy a life annuity later
Dear Mr. Tan,
I am 48 yr of age. I am comtemplating to buy an annuity now, the payout to start from, maybe 55 or 60 yrs onwards. I found the payout be be exceedingly low. For a $100K annuity, the guarantee payout is about $400 per month plus an non-guaranteed amount for the rest of the life. A little calculation shows the breakeven for the investment is about 25 to 30yrs, hardly seemed worthwhile, not factoring inflation yet. May I have your advise on the investment?
REPLY
I suggest that you invest in a low cost investment fund for the next 10 to 20 years and find a right time, when the market is high, to convert into a life annuity when you are older, say from age 60 to 70 years.
Read this FAQ:http://www.tankinlian.com/faq/savings.html
I am 48 yr of age. I am comtemplating to buy an annuity now, the payout to start from, maybe 55 or 60 yrs onwards. I found the payout be be exceedingly low. For a $100K annuity, the guarantee payout is about $400 per month plus an non-guaranteed amount for the rest of the life. A little calculation shows the breakeven for the investment is about 25 to 30yrs, hardly seemed worthwhile, not factoring inflation yet. May I have your advise on the investment?
REPLY
I suggest that you invest in a low cost investment fund for the next 10 to 20 years and find a right time, when the market is high, to convert into a life annuity when you are older, say from age 60 to 70 years.
Read this FAQ:http://www.tankinlian.com/faq/savings.html
Monday, May 12, 2008
Travel and term insurance
Dear Mr Tan
Even though you have retired, you still make yourself available for help for those who need you.
For my family year end vacation, I usually purchase travel insurance from either AIA or NTUC. Can I buy both? Is it an offence to do so?
When someone buy life or term insurance for many years, will the insurance firm pay when he is sentenced to death for capital offences?
Many American insurance websites offer cheap term life from reliable insurance firms. Can Singaporeans purchase these insurance? Is there any laws prohibiting us to buy from them?
REPLY
There is no point to buy travel insurance from two insurance companies. You can only claim for the actual amount of the loss. You cannot claim two times, even though you pay two premiums for travel insurance.
A term or life insurance policy pays for death from any reason, except for suicide in the first year. The family can claim for the death benefit on a term or life insurance policy for a person who is sentenced to death for capital punishment.
You can buy term insurance from the American website. Be sure that you have checked the reliability of the insurance firm. However, you may find some difficulty in making a claim due to difference in law. It is better to buy term insurance from a Singapore insurance company, even if the premium is slightly higher.
Even though you have retired, you still make yourself available for help for those who need you.
For my family year end vacation, I usually purchase travel insurance from either AIA or NTUC. Can I buy both? Is it an offence to do so?
When someone buy life or term insurance for many years, will the insurance firm pay when he is sentenced to death for capital offences?
Many American insurance websites offer cheap term life from reliable insurance firms. Can Singaporeans purchase these insurance? Is there any laws prohibiting us to buy from them?
REPLY
There is no point to buy travel insurance from two insurance companies. You can only claim for the actual amount of the loss. You cannot claim two times, even though you pay two premiums for travel insurance.
A term or life insurance policy pays for death from any reason, except for suicide in the first year. The family can claim for the death benefit on a term or life insurance policy for a person who is sentenced to death for capital punishment.
You can buy term insurance from the American website. Be sure that you have checked the reliability of the insurance firm. However, you may find some difficulty in making a claim due to difference in law. It is better to buy term insurance from a Singapore insurance company, even if the premium is slightly higher.
Sunday, May 11, 2008
Blog: Suggestions for improvements
I am posting suggestions for improvements through my blog. There are directed at various organisations, such as:
Starhub
Central Depository (CDP) or Singapore Exchange
Land Transport Authority
DBS
... and others
I hope that some employees of these organisations read my blog and will bring it up to their management. You can take it as your own suggestion. Let us together, reduce wastefulness, reduce cost and improve service.
I invite other readers to send their suggestions for improvements for posting in my blog. I also invite the respective organisations to send a reply to me for posting in my blog.
Starhub
Central Depository (CDP) or Singapore Exchange
Land Transport Authority
DBS
... and others
I hope that some employees of these organisations read my blog and will bring it up to their management. You can take it as your own suggestion. Let us together, reduce wastefulness, reduce cost and improve service.
I invite other readers to send their suggestions for improvements for posting in my blog. I also invite the respective organisations to send a reply to me for posting in my blog.
Suggestions for Central Depository (CDP)
At present, the CDP sends 2 statements for each share transaction. They arrive a few days after the transaction and are usually ignored. It is perhaps cheaper for them to send the details by SMS or e-mail, and save on the cost of mailing and postage. The stockbroker also send their statements, which is another layer of duplication.
I hope that CDP and the stockbrokers can work together to reduce the wastage in reporting on the share transactions. Immediate notification can be done by SMS or email. The other details can be sent in a monthly statement.
I hope that CDP and the stockbrokers can work together to reduce the wastage in reporting on the share transactions. Immediate notification can be done by SMS or email. The other details can be sent in a monthly statement.
Wastefulness
Starhub sends a self -addressed pre-paid envelope to their customers, even for those who pay through GIRO. The envelope is hardly used. It goes into the waste bin. I hope that Starhub will reduce this wastefulness, and maybe reduce their charges for customers.
Different access numbers for hotlines
Whenever I call Starhub, I am asked for the language (2 options) and the type of service (3 options).
It will be helpful if Starhub can give 6 different access numbers, so that it will be directly straight to the 6 groups of hotline staff (and avoid making the customer waste time to listen and press button two times).
The specific number can be given to the customer according to their type of service and language preference.
It will be helpful if Starhub can give 6 different access numbers, so that it will be directly straight to the 6 groups of hotline staff (and avoid making the customer waste time to listen and press button two times).
The specific number can be given to the customer according to their type of service and language preference.
Collective Protest - update at 11 May
I received about 60 envelopes with 107 signatures this morning. Thank you for your support.
Most signature lists contain just 1 or 2 signatures. It will be helpful if you can round up your neighbours, work colleagues and friends and fill up the signature page (or several pages) before you mail them to me. This will save on the work of individual persons and reduce the number of envelopes and postages. It will also reduce my work.
Alternatively, you can scan the signature list and e-mail to kinlian@gmail.com
Most signature lists contain just 1 or 2 signatures. It will be helpful if you can round up your neighbours, work colleagues and friends and fill up the signature page (or several pages) before you mail them to me. This will save on the work of individual persons and reduce the number of envelopes and postages. It will also reduce my work.
Alternatively, you can scan the signature list and e-mail to kinlian@gmail.com
Earn a good yield on Medisave
Dear Mr. Tan,
Someone told me that you recommend paying premium for Shield out of pocket, instead of Medisave. You also said to pay the co-payment using cash, instead of claiming against Medisave. Why?
REPLY
If you have the cash, it sits in the bank earning less than 1% per annum. You can use it to pay the Shield premium and the co-payment (for hospitalisation).
If you do not touch your Medisave savings, it will earn interest at 4% plus 1% bonus, making a total of 5%. This is a good yield.
You will need your Medisave savings to pay for the insurance premium and hospital co-payments when you grow old. If you do not use it, the excess, above the cap, can be transferred into your retirement account to be paid out monthly.
The Medisave account is a good form of investment earning 5% without any risk.
Read this FAQ for more explanation:
http://www.tankinlian.com/faq/shield.html
Someone told me that you recommend paying premium for Shield out of pocket, instead of Medisave. You also said to pay the co-payment using cash, instead of claiming against Medisave. Why?
REPLY
If you have the cash, it sits in the bank earning less than 1% per annum. You can use it to pay the Shield premium and the co-payment (for hospitalisation).
If you do not touch your Medisave savings, it will earn interest at 4% plus 1% bonus, making a total of 5%. This is a good yield.
You will need your Medisave savings to pay for the insurance premium and hospital co-payments when you grow old. If you do not use it, the excess, above the cap, can be transferred into your retirement account to be paid out monthly.
The Medisave account is a good form of investment earning 5% without any risk.
Read this FAQ for more explanation:
http://www.tankinlian.com/faq/shield.html
Term and critical illness
Dear Tan Kin Lian,
Beside accidental, natural death and Total Permanent Disability, does Term Life Insurance cover the 36 critical Illness?Example: If someone purchase Term Life Insurance and unfortunately he die because of kidney failure (one of the 36 critical Illnesses).
REPLY
Term insurance pays on death for all causes, including death from all the critical illnesses (i.e. natural death).
A critical illness policy pays immediately on the covered critical illness (i.e. does not need to wait until death occurs). Hence, the critical illness pays earlier. The money can be used to treat the critical illness. The premium for cricial illness is higher than for term insurance, usually by about 50%.
If you are covered under a medical insurance policy, which can take care of the treatment of critical illness, you can buy a term insurance to cover death (instead of a critical illness policy).
Beside accidental, natural death and Total Permanent Disability, does Term Life Insurance cover the 36 critical Illness?Example: If someone purchase Term Life Insurance and unfortunately he die because of kidney failure (one of the 36 critical Illnesses).
REPLY
Term insurance pays on death for all causes, including death from all the critical illnesses (i.e. natural death).
A critical illness policy pays immediately on the covered critical illness (i.e. does not need to wait until death occurs). Hence, the critical illness pays earlier. The money can be used to treat the critical illness. The premium for cricial illness is higher than for term insurance, usually by about 50%.
If you are covered under a medical insurance policy, which can take care of the treatment of critical illness, you can buy a term insurance to cover death (instead of a critical illness policy).